As you physically power down at night, your brain—and imagination—run wild
• It all starts with the brain stem, which flips you into sleep mode and—once you hit the rapid eye movement (REM) stage—shuts off muscle movement. Everything but your eyes is temporarily paralyzed. (Good thing, or you'd physically act out your reveries.)
• Meanwhile, your brain stem's nerve cells may fire erratically. Some experts believe dreaming happens when the thinking part of the brain tries to make sense of these signals.
• Parts of your frontal cortex—i.e., where your smarts lie—are offline. Without logic, reasoning, or judgment, the normal rules of space and time don't apply. Hence, one minute you're sweating an exam for a class you never took, the next minute you can fly.
• Dreams do engage the brain's hippo-campus, its cradle of memories, and the amygdala, a key player in emotion. That's why they can involve actual events (albeit in twisted ways) and make you feel genuinely frightened or happy.
• Even though there's nothing for your eyes to look at, your brain's visual cortex, the area that interprets images, comes alive. This is why you can "see" all the action in your head.
• Most dreaming occurs during REM sleep. You can, however, have non-REM dreams, though they tend to be different—more mundane and less "only in your dreams" (e.g., driving a car versus winning the lottery).
• Though people spend one to two hours a night in REM sleep, most don't remember their dreams. Experts don't know why, exactly, but it could be a coping mechanism: If you remembered everything, your mind might have a hard time distinguishing between actual and dreamed events.
• In fact, researchers remain divided over why you dream what you do (is it all just totally random or some sort of emotional outlet?). Dreams may help you process the complex sentiments of life or, by their strange reenactments, subconsciously cement memories. Or perhaps it's something much simpler: Since dreams become more frequent as your wake-up time nears, their virtual world could be prepping you for entry into the real thing.
Source; http://www.womenshealthmag.com